What You Need To Know About Cryptocurrency Wallets

By Steven Krohn · March 12, 2018

“At their core, cryptocurrencies are built around the principle of a universal, inviolable ledger, one that is made fully public and is constantly being verified by these high-powered computers, each essentially acting independently of the others.” – Paul Vigna

Cryptocurrency Wallets:

The place where you store your coins is called a cryptocurrency wallet. That simply means that you have a software address where coins are stored with a secret key to access them.

The address and key may be stored electronically or via paper as long as you save it and remember where you put it.

A wallet can be online or offline. Online wallets can one of two types – first is a wallet that is accessible at various locations, second is a wallet stored on your PC. The offline wallet can be an equipment- based wallet. This is much the same as a memory card or garbage drive that can be accessed using a USB port.

As Cryptocurrency depends on code, the most secure method to protect your wallet is the paper-based option.

Without cryptographic money wallets, coins would be nothing as it’s the main way people embrace advanced currency standards. Cryptocurrency wallets are similar to the wallets that most of us have to carry cash and credit cards. Essentially, these wallets enable people to own cryptocurrency.

What Are The Best Cryptocurrency Wallets?

Just like banks have account names and numbers; cryptographic currencies have addresses to each wallet on the blockchain. That wallet has a public address and a private address.

The public address is where you acquire tokens or altcoins. The private address gives you access to your wallet to send tokens or altcoins.

Types Of Wallets:

Hardware wallets: Holds your “private keys” offline in what’s called “cold storage”. This mean there is no linkage to the web. This secures your wallet against malignant programmers/programming.

A hardware wallet is set up with what’s known as a “seed expression“. This is a series of words (which are unique to you) that help you regain access to a wallet should you lose or damage it. Setting up a hardware wallet is simple, just connect it to a USB port then download the related programming.

Desktop wallets: Downloaded and kept on a computer. This type of wallet can often offer high levels of security. That said, if your PC is hacked or infected with a virus it’s highly probable that you will lose your currency.

Online wallets: Run on the cloud and are accessible from any device. in any location. Online wallets store your private keys on the web and are controlled by a third party. This, unfortunately, makes them defenseless against hackers and theft.

Paper wallets: Easy to use and have a high level of security. One can also refer to a piece of software that is used to securely generate a pair of keys that you need to print. If you want to withdraw or spend currency you simply exchange your coins from your paper wallet to your product wallet.

Do You Need a Wallet For Each Cryptocurrency?

Yes, it is absolutely necessary.

Each specific Cryptocurrency requires it’s own digital wallet where coins can be stored. There are many types of digital wallets such as desktop wallets, mobile wallets, web-based wallets, etc.

At first, wallets can certainly be difficult to keep track of if you invested in multiple currencies. Why? You require a different wallet for each coin, which is time consuming and requires space.

With the huge demand and awareness now of cryptocurrencies, the wallet process has been refined and simplified. Extensive time and effort has been invested to make the system more effective and efficient.

Factors To Consider When Choosing a Cryptocurrency Wallet

Compatibility: The wallet should be compatible with different operating systems.

Security features: Security features are the prominent issue when choosing a cryptocurrency wallet. Therefore, it’s best to seed backup keys and pin codes first.

Regulate private keys: A cryptocurrency wallet is where you can store and secure your private keys.

There is no such thing as a single wallet that stores every kind of coin. You will have to determine which wallets you need based on which coins you own.

It is extremely important that crypto holders never share their wallet password or private key with anyone.

To emphasize, when you send or receive coins you only need to share your public cryptocurrency wallet address.